JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Thursday, Morgan Stanley (NYSE:MS) reaffirmed its positive stance on Alibaba Group Holding Limited (NYSE:BABA), maintaining an Overweight stock rating and a price target of $180.00. The investment firm’s decision comes after Alibaba’s recent earnings report. InvestingPro analysis indicates BABA is currently undervalued, with the stock showing impressive YTD returns of 46%.
According to the firm, the current dip in Alibaba’s share price is attributed to market expectations that were too high for the company’s cloud segment. Despite this, Morgan Stanley anticipates an upswing in Alicloud’s revenue growth, spurred by increasing industry demand expected to rise after March. The company maintains solid fundamentals with an overall Financial Health Score of "GREAT" according to InvestingPro metrics.
The analysts at Morgan Stanley expressed confidence in the continued double-digit growth of Alibaba’s China marketing platform (CMR), alongside improvements in the take-rate, which measures the percentage of sales Alibaba takes as commission. With a P/E ratio of 19.14 and steady revenue growth of 5.85%, the firm’s stance remains unchanged post-earnings, signaling a belief in Alibaba’s ability to sustain growth and profitability.
In the earnings follow-up, the analysts highlighted that Alibaba’s overall performance aligns with the broader industry’s trends and the company’s strategic positioning. The firm’s optimistic outlook is based on the potential for accelerated growth in the cloud sector and the robust performance of Alibaba’s core commerce business.
Morgan Stanley’s analysis suggests that despite the immediate market reaction to Alibaba’s earnings, the company’s long-term prospects remain strong. With the maintained Overweight rating and a steady price target, the investment firm endorses Alibaba’s stock for investors seeking exposure to the company’s growth trajectory.
In other recent news, Alibaba Group Holding Ltd has been the subject of several analyst reports and company announcements. Morgan Stanley reiterated its Overweight rating for Alibaba, maintaining a price target of $180. The firm forecasts Alibaba’s cloud revenue growth to accelerate, projecting an increase from 13% in the third quarter of fiscal year 2025 to 25% by fiscal year 2026. Barclays (LON:BARC) also maintained its Overweight rating with the same price target, noting the company’s significant role in China’s AI infrastructure, which is expected to benefit from the industry’s expansion. Citi analyst Alicia Yap reaffirmed a Buy rating with a $169 target, highlighting Alibaba’s focus on AI advancements and technological innovation.
Additionally, Alibaba has announced an update on its ongoing share repurchase program, which aims to return value to shareholders and demonstrates confidence in its long-term growth prospects. The company has not disclosed specific details regarding the number of shares repurchased. Meanwhile, ZTO Express (NYSE:ZTO) appointed Ms. Di Xu as a new director, succeeding Mr. Xudong Chen, who resigned without any disagreement with the company. Ms. Xu brings extensive investment experience, including her role as an investment director at Alibaba. These developments reflect Alibaba’s strategic positioning in the market and its efforts to enhance shareholder value.
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